What term describes a situation where someone is not sufficiently insured against particular losses?

• A. Underinsured
• B. Overinsured
• C. Insufficient coverage
• D. Excess coverage

Answer: (A)

The term that describes a situation where someone is not sufficiently insured against particular losses is "underinsured." When an individual or entity is underinsured, it means that their insurance coverage is inadequate to cover the potential losses they may face. This can result in significant financial difficulties in the event of a claim because the insured might find themselves responsible for covering the difference between their policy limits and the actual costs incurred.

Underinsurance can occur in various contexts, such as property insurance, health insurance, or liability coverage, where the limits of the policy may not fully protect against the identified risks. Being aware of one's insurance needs and ensuring that coverage aligns with potential exposure is crucial for financial security.

In contrast, overinsurance would mean having more coverage than necessary, which could lead to higher premiums without added benefit. Insufficient coverage communicates a similar idea but lacks the specific industry term recognition that "underinsured" carries. Excess coverage describes a situation where additional coverage is provided beyond what is typically needed or required, which is not relevant to the question's context.